VoIP Revenues in the U.S. Reach $1 Billion Annually

Telecom News Editorials Reports Glossary

6:30 am on May 24, 2006 | Category: VoIP

VoIP telephony has quickly transformed itself from a small niche service to a mainstream communication technology, with revenues more than quadrupling in 2005.

A new study from TeleGeography Research shows that total VoIP revenues in the U.S. broke the $1 billion milestone last year, up from just $212 million in 2004. The number of IP voice subscribers also skyrocketed 189% in between Q1 2005 and the first quarter of this year.

A driving force behind this massive growth would have to be the cable operators entering the market with their digital phone offerings. These services are now taking the lion’s share of the VoIP market, by enticing existing cable TV and internet customers to bundle voice with their service selections.

Although VoIP services still only account for about 7% of the total local and long distance calling market, they are increasingly threatening the dominance of incumbent local exchange carriers. TeleGeography predicts that VoIP will capture 22% of current telephone users between 2006 and 2010, resulting in $18.2 billion in lost revenue for traditional telephone providers.